GLOBAL TURNIGN POINTS for Business and Society. The New Demography. Mauro F. Guillén Emilio Ontiveros

Transcription

1 GLOBAL TURNIGN POINTS for Business and Society The New Demography Mauro F. Guillén Emilio Ontiveros

2 Demography What is demography? Demography is the study of human populations. Why should we care about demographic trends?

3 Economic Importance of Demography Production: Relative abundance of labor depresses wages: global redistribution of production. Women s participation in the labor force. Consumption: Size of the market. Age structure / population ageing: demand for education, financial services, healthcare, leisure, etc. Savings: Age structure of the population. Flows of capital from higher to lower-saving countries.

4 Political Relevance of Demography Allocation of parliamentary seats by district. Voting behavior: Life-cycle patterns. Cohort effects. International migration: Changes in the demographic makeup of a country. Immigrant communities tend to be concentrated in a handful of cities. Nationalism: Demography as integral part of nation-building. Xenophobic political parties and social movements (reaction against immigration).

5 Impact of Demography on the Welfare State In the rich countries (and some emerging economies): Lower birth rates. Higher life expectancy. Difficult to reallocate resources across: Education. Healthcare. Old-age pensions. Chronic problems with funding pay-as-you-go or defined benefit welfare programs (as opposed to defined contribution programs).

6 Geopolitical Impact of Demography Population size and global power: Development stars of the 1960s-80s: South Korea, Taiwan, Singapore, and Hong Kong. Development stars of the 1990s & 2000s: China, India, and Brazil. Discussion question: are population size and density both relevant from a geopolitical point of view?

7 What is Demography? The systematic, often statistical, study of human populations, especially with reference to size and density, distribution and vital statistics. Small demographic alterations can cause large transformations if trends persist for years. Demographic reversals take years to occur. Demographic policies are hard to design, difficult to implement, and have effects only years into the future.

8 World population projections (in billions) Source of the data: United Nations Population Division, World Population Prospects: The 2015 Revision.

9 Discussion Question Which of the four projections do you believe is least likely?

10 Discussion Question Which of the four projections do you believe is most likely?

11 We need to make assumptions about key magnitudes Total Fertility = Children per woman. The average number of children a hypothetical cohort of women would have at the end of their reproductive period if they were subject during their whole lives to the fertility rates of a given period, and if they were not subject to mortality. Life Expectancy at birth = The average number of years of life expected by a hypothetical cohort of individuals who would be subject during all their lives to the mortality rates of a given period.

12 Assumptions (by the UN Population Division) Four different assumptions on fertility: No change. High. Medium. We will use this one. Low. Mortality (or life expectancy): Only one variant is used in the projections.

13 Regions by Level of Economic Development More developed: Europe, US, Canada, Australia, New Zealand, Japan. Less developed: Africa, Asia (except Japan), Latin America and the Caribbean, and Oceania (excluding new Zealand). Least developed: 49 countries in Africa (34), Asia (9), Oceania (5), and Latin America (1). We will exclude the least developed from the less developed category.

14 Medium Fertility Projections (children per woman) Note: A total fertility rate of 2.1 children per woman is generally considered to be necessary for population replacement. Source: United Nations Population Division, World Population Prospects: The 2015 Revision.

15 Discussion Question Why do demographers assume that a population needs a fertility rate of approximately 2.1 children per woman in order for inter-generational replacement to take place?

16 Medium Life Expectancy (in years) Source: United Nations Population Division, World Population Prospects: The 2015 Revision.

17 Africa. Regions of the World Eastern Asia: China, Japan, the two Koreas, Mongolia. Southeastern Asia. South-Central Asia: From Iran to Bangladesh, plus the Stans. Western Asia: From Turkey to Iraq, plus the Caucasus and the Arabian peninsula. Europe (including the Russian Federation). Latin America and the Caribbean.

18 Regional Distribution of the Population (%) Source: United Nations Population Division, World Population Prospects: The 2015 Revision.

19 Discussion Question What does the demographic rise of Africa mean for global economic and geopolitical dynamics?

20 Further Topics Changing age structure of the population. The millennial generation. The population 60+ years of age.

21 LARGEST MILLENNIAL POPULATIONS (AGE 15-35) Region =100 Asia Sub-Saharan Africa Latin America & Caribbean Europe Western Asia USA & Canada Northern Africa Eastern Europe Western Europe World Source: United Nations Population Division, World Population Prospects: The 2015 Revision.

22 TOP 20 COUNTRIES MILLENNIAL POPULATIONS Top 20 Countries in =100 India China Indonesia Nigeria USA Pakistan Brazil Bangladesh Ethiopia Mexico DR of Congo Philippines Egypt Russian Federation Tanzania Viet Nam Turkey Iran Kenya Japan Source: United Nations Population Division, World Population Prospects: The 2015 Revision.

23 POPULATION YEARS OLD IN 2015 Source: United Nations Population Division, World Population Prospects: The 2015 Revision.

24 POPULATION YEARS OLD IN 2030 Source: United Nations Population Division, World Population Prospects: The 2015 Revision.

25 THE 60+ MARKET Source of the data: United Nations Population Division, World Population Prospects: The 2015 Revision.

26 POPULATION 60+ YEARS OF AGE Region =100 Asia Europe Latin America & Caribbean Africa USA & Canada Sub-Saharan Africa Eastern Europe Western Europe Western Asia World Source of the data: United Nations Population Division, World Population Prospects: The 2015 Revision.

27 TOP 20 COUNTRIES POPULATION 60+ Top 20 Countries in =100 China India USA Japan Brazil Indonesia Russia Germany Mexico Italy Bangladesh Pakistan France United Kingdom Viet Nam Thailand Republic of Korea Spain Turkey Iran Source of the data: United Nations Population Division, World Population Prospects: The 2015 Revision.

28 POPULATION 60+ IN 2015 Source of the data: United Nations Population Division, World Population Prospects: The 2015 Revision.

29 POPULATION 60+ IN 2030 Source of the data: United Nations Population Division, World Population Prospects: The 2015 Revision.

30 Ageing and Stock Prices P/E: price/earnings. M/O: age 40 49/age Source: Zheng Liu and Mark M. Spiegel, Boomer Retirement: Headwinds for U.S. Equity Markets? Federal Reserve Bank of San Francisco. Reprinted with permission from the Federal Reserve Bank of San Francisco. Economic Letter , August 22, The opinions expressed in this article do not necessarily reflect the views of the management of the Federal Reserve Bank of San Francisco, or of the Board of Governors of the Federal Reserve System.

31 Discussion Question What are the consequences of population ageing for the stock market?

32 Urbanization Source: United Nations Population Division, World Urbanization Prospects: The 2015 Revision.

33 World s Largest Cities 1960 Source: United Nations Population Division, World Urbanization Prospects, the 2011 Revision.

34 World s Largest Cities 1970 Source: United Nations Population Division, World Urbanization Prospects, the 2014 Revision.

35 World s Largest Cities 2014 Source: United Nations Population Division, World Urbanization Prospects, the 2014 Revision.

36 World s Largest Cities 2030 Source: United Nations Population Division, World Urbanization Prospects, the 2014 Revision.

37 Discussion Questions What are the implications of the growth of cities for consumer markets? And for food and water?

38 Global Cities A city whose importance and identity transcends the country in which it is situated. The place where the work of globalization gets done (Saskia Sassen). Crucial dimensions: economy, finance, politics, culture, diversity.

39 Features of Global Cities Large, influential, prominent. Culturally and ethnically diverse. Culturally thriving: museums, music, universities, schools, etc. Advanced infrastructure. Rich in business services. Open, friendly, safe. Legally and politically secure.

40 Drivers of Global Cities Agglomeration economies. Growth of specialized service firms. Coordination of dispersed activities. New communication technologies.

41 Largest City GDPs City/Metro Area US$ bn Tokyo 1520 New York City 1210 Los Angeles 790 Seoul 774 London 731 Paris 669 Osaka/Kobe 654 Chicago 525 Moscow 520 Shanghai 517 Selected Countries US$ bn Australia 1542 Mexico 1177 Turkey 788 Holland 771 Saudi Arabia 711 Switzerland 631 Iran 548 Sweden 523 Norway 500 Poland 490 Sources of data: Brookings Institution; IMF.

42 Types of Global Cities Truly global hubs: London and New York. Regional hubs: Singapore, Panama, Miami, Dubai. Gateways: Hong Kong, Sydney.